Consumer Confidence Index Improves in December

December 28, 2006byJCK Magazine

The Conference Board Consumer Confidence Index, which was virtually unchanged in November, improved in December. The Index now stands at 109.0 (1985=100), up from 105.3 in November. The Present Situation Index increased to 129.9 from 125.4. The Expectations Index improved to 95.1 from 91.9 last month.

“Despite the latest improvement in the Index, there is little to suggest that the pace of economic activity in the final quarter of 2006 is anything but moderately better than its uninspiring performance earlier this year,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Given the see-saw pattern in recent months, it is too soon to tell if this boost in confidence is a genuine signal that better times are ahead.”

Consumers’ overall assessment of present-day conditions was more upbeat than in November. Those claiming conditions are “bad” decreased to 14.6 percent from 16.2 percent. Those saying conditions are “good,” however, edged down to 27.2 percent from 27.5 percent. Labor market conditions also improved from last month. Consumers saying jobs are “hard to get” declined to 21.2 percent from 22.1 percent. Those claiming jobs are “plentiful” increased to 26.9 percent from 25.7 percent in November.

Consumers’ outlook for the next six months was more encouraging than in November. Those anticipating business conditions to worsen decreased to 7.9 percent from 8.5 percent. Those expecting business conditions to get better increased slightly to 16.3 percent from 16.0 percent. The outlook for the labor market improved moderately. Consumers expecting more jobs to become available in the coming months edged up to 14.0 percent from 13.3 percent, while those anticipating fewer jobs edged down to 15.9 percent from 16.1 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 19.6 percent from 22 percent in November.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, a custom research company. The cutoff date for December’s preliminary results was Dec. 19.